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Date: 17 October 2018
Specialized in building civilian and non-defense satellites for everything

Specialized in building civilian and non-defense satellites for everything :: 22 February, 2007

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At the south end of Palo Alto, barely visible from Highway 101, sits one of Silicon Valley's oldest, but least-known, manufacturing companies -- Space Systems Loral.

For 50 years, under a succession of corporate owners, Loral's engineers and technicians have specialized in building civilian and non-defense satellites for everything from beaming television to collecting data for weather maps.

Experts say aerospace companies like Loral are bouncing back from post-Cold War defense cutbacks and the dot-com crash that crimped demand for these orbiting electronic platforms. Suddenly, orders are booming for civilian satellites that can cost $100 million to $300 million to build, driven largely by what seems to be the insatiable appetite of earthlings for television signals.

For Space Systems Loral, where employment peaked at 3,300 in the mid-1990s only to plunge to roughly half that before the recent rebound, the upturn comes at a time when the industry, including nearby competitor Lockheed Martin Corp., faces an ironic challenge: The aerospace workforce is aging and replacements are hard to come by.

"The biggest problem facing aerospace is summed up in the number 27," said Jeremiah Gertler, assistant vice president with the Aerospace Industries Association. "That's the percentage of the aerospace technical workforce, engineers and technicians, who become eligible for retirement within the next year and a half."

This brain drain is a headache for Loral, which hired about 400 people in 2006 to bring its workforce to 2,100. It plans to add 300 jobs in Palo Alto this year.

Asked why -- when manufacturing jobs are fleeing the valley -- Loral can still build satellites here, Senior Vice President Arnold Friedman held up his hands toward the Palo Alto campus.

"It's the people," Friedman said, ticking off the talents needed to make a satellite, including materials and structural sciences, physics, electrical engineering and communications. "We have assembled a skilled workforce that only exists in a few places in the world."

Like most every field of technology, the satellite business finds itself competing for a limited supply of engineering talent.

Marco Caceres, a senior space analyst for the Teal Group in Fairfax, Va., said that in addition to Loral and Lockheed Martin, the other big U.S. satellite-makers are Boeing and Orbital Sciences. Two European firms, Alcatel Alenia and EADS Astrium, round out the top tier of manufacturers worldwide.

"Loral has always been up there in the top two or three," he said.

Figures from the Satellite Industry Association show that satellite manufacturing has had a bumpy ride, with worldwide sales ranging from $11.5 billion in 2000 to $7.8 billion in 2005, the most recent year for which data are available.

David Cavossa, executive director of the Satellite Industry Association, said television broadcasts have long been beamed up to satellites and then bounced back down around the world.

The migration to high-definition television is expected to increase this demand. Cavossa said HDTV signals can require up to six times as much satellite capacity as ordinary TV broadcasts. Broadcasters are working on ways to compress HDTV signals and squeeze more out of their existing satellites, so Cavossa isn't expecting a sixfold increase in orders. Still, he does predict "a substantial increase in demand."

At the same time, television providers like DirecTV and Dish Network and space-based radio broadcasters such as Sirius and XM are also putting satellites into orbit.

As a reporter toured Loral's factory, an XM-5 satellite moved through the production line.

Forget the rush-rush, clang-clang notions of the assembly line. At Loral, technicians in white coats and hats -- to keep dust and hair from fouling the electronics -- install components and then double-, triple- and quadruple-check their work. The pace is slow. Attention to detail is a must. It can take two to three years to build a satellite, and caution on the ground is time well spent, said Dan Collins, 67, who retired from Loral in 2002.

"There's a lot of discipline involved in building satellites," Collins said. "We test and test and test things before we ever launch them, because once we launch, it's beyond retrieving and rectifying."

Standing on the factory floor, wrapped in plastic and awaiting delivery, satellites do not look particularly impressive. They're designed to fit inside the nose cones of the rockets that will carry them most of the way into orbit, and cargo is limited to a package about 12 feet in diameter and 25 feet tall.

Loral does not launch rockets but instead contracts with one of a handful of commercial firms such as Sea Launch, an international consortium managed by Boeing, or Arianespace, a European concern. Loral vice president for sales Tony Colucci said it costs about $25,000 per pound to put a satellite into orbit.

To reduce weight, their frames are made of strong, light materials such as titanium and carbon and graphite composites. Even so, a large bird like the radio-broadcasting XM satellite can weigh about 13,000 pounds, Colucci said. About half of that, he said, is the onboard fuel the satellite uses to maneuver into its assigned orbit once the big rocket has delivered it into space.

Once in orbit, a satellite is expected to function flawlessly for 12 to 15 years. Senior engineer Larry Johnson said some of the most critical prelaunch tests occur in a gigantic thermal vacuum chamber nicknamed the "blue pumpkin," owing to its color and shape. Cranes lift the satellite and place it inside the pumpkin, then lower a 17-ton lid to create a seal. It takes about 12 hours to suck the air out of the enclosure to simulate a vacuum. Technicians then spend about a month running tests to assess how the satellite performs, varying temperatures inside the pumpkin from blazingly hot to blisteringly cold.

Once the satellite has maneuvered into position, the rectangular form spreads its wings -- two 60-foot-long solar arrays, one on either side. These arrays provide power to run the satellite. The smaller the target on Earth -- think of the TV dish on the roof or the receiver inside a satellite radio -- the more power needed aboard the satellite, making solar technology one of the limiting factors.

Once a large satellite like the XM has deployed its solar wings, it becomes 134 feet long -- slightly longer than a 737 jet, Loral says.

Today's satellites are a far cry from the tiny objects that U.S. engineers started sending into orbit after the launch of the Russian spacecraft Sputnik in 1957 began the "space race."

Back in those days, the Palo Alto factory was owed by Philco, the now-defunct radio and television maker. In the early 1960s, Philco was acquired by Ford Motor Co. and for nearly 30 years the site operated under the name of Ford Aerospace.

In 1990, Loral Corp., then a defense contractor, acquired Ford Aerospace and gave the satellite factory its current name.

Much has changed since the Sputnik era, including the engineering ethos of Silicon Valley. Consider how "launch" is used to describe startups that, particularly in the Web 2.0 environment, rush out prototypes and fix bugs as customers find them. That's the antithesis of the satellite-making art, said Collins, the Loral retiree.

"We need a certain type of engineering personality, the engineer who's more satisfied making it right the first time," he said.

If finding workers with the right stuff is a prime concern for aerospace companies, helping them find the right customers is paramount for their trade organizations. Cavossa, the Satellite Industry Association official, said the rules governing exports that have military applications put U.S. makers at a disadvantage vis a vis European competitors.

"The U.S. export control regime is flawed," Cavossa said.

Satellite-makers have an influential friend in U.S. Rep. Ellen Tauscher, D-Walnut Creek, new chairwoman of the House Strategic Forces subcommittee. Tauscher, who noted in a speech last year that the U.S. share of the global satellite market has fallen from 64 percent in 1998 to 36 percent in 2002, will be among the speakers scheduled to appear at the Satellite 2007 conference that kicks off Monday in Washington.

Gary Allen, with the International Association of Machinists and Aerospace Workers, which represents some satellite workers though none at Loral, agrees that satellites remain one of the last industries in which the United States has "technological dominance." And he echoed concerns about the graying of the aerospace workforce. But Allen said the best thing the federal government could do to make U.S. companies more competitive would be to find ways to lift the health care burden off employers and workers -- as European governments have already done.

Meanwhile, as managers at Loral try to staff up, their biggest challenge may be convincing engineers and technicians to hitch their wagons to the stars.

"As people today relate to Google or Yahoo, we were the hot new thing 40 years ago," recalled Chris Hoeber, a Loral manager who started building satellites in the 1970s.

Hoeber -- sensitive about the whole old-guys-in-the-aerospace-industry angle -- volunteered that he would soon celebrate his 60th birthday by swimming 20 miles. Maybe, he said, "A lot of people will still find satellite-building cool because it's something you can see and touch and appreciate."

Release link: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/02/18/BUGQ8O5NDA1.DTL

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